Reliance on one customer can prove to be disastrous for a business, even when the business is growing fast.
A Southern based supplier of temporary healthcare workers experience this recently.
Almost 90% of their sales are to a single customer with only an a average credit rating. A pay-when-pay clause in the terms & conditions making the situation worse.
The existing financier began to restrict funding due to credit limit and concentration concerns, and this otherwise successful and profitable business was struggling to pay their staff.
BM Structured Finance sourced a standalone Credit Insurance policy, and introduced two new Invoice Financiers who were happy to fund high concentration ledgers.
Within one week of the introduction, a formal offer for a £200k invoice finance facility, with 85% prepayments was made, and the refinance was completed 5 days later.
The terms of the new facility mean the company can focus on continued growth, knowing they will benefit from full funding on their ledger.
In addition they were able to successfully negotiate increased pricing with their prime customer in return for maintaining the level of temporary staff they were providing.
Read more invoice finance case studies below.
Author – Simon Belton
Director at BM Structured Finance
Over the last 25 years Simon has gained vast experience understanding and articulating his client’s critical business issues and using his business finance skills to help them to succeed.
Simon has held senior roles in all areas of the invoice finance sector including business development, risk and client relationship management. He has been involved in setting up new invoice finance products and companies and the successful sale of divisions to other financial institutions.
Simon’s role as a training consultant and business finance broker at BM Structured Finance involves:
► Company wide training and consultancy services.
► Business set up & bringing new products to market.
► Business development (outsourced selling).
► Operational reviews, support and fraud prevention.
► Underwriting and structuring invoice finance/asset based finance facilities.
► Client surveys/due diligence.
Email Simon | T +44 (0) 20 7549 8003
BM Structured Finance is an independent finance brokerage providing impartial advice on all aspects of business finance.
We advise and assist clients in sourcing the right financial products for their specific business needs.
With offices in London, Worthing, Gatwick, Blackburn & Manchester, we can support you where you need us.